United Nations: Increased Pension Coverage Key To Future Global Development

United Nations

The International Labour Organization (ILO), a UN agency, released a report yesterday warning that 48 percent of the world’s population didn’t have access to a retirement benefit of any kind in 2013.

The report, titled Social Protection for older persons: Key policy trends and statistics, said that retirement benefits make “good economic sense” and aid global economic development—but many countries are cutting back on benefits due to austerity measures. From the United Nations:

According to ILO, although more than 45 countries have reached 90 per cent pension coverage and more than 20 developing countries have achieved or nearly achieved universal pension coverage, the trend of fiscal consolidation spurred by austerity has led to a contraction in social protection for older persons with consequent adjustments.

These include cuts in health and other social services, the reduction of benefits and increase in contribution rates and the raising of the retirement age.

“These adjustments are undermining the adequacy of pension and welfare systems and reducing their ability to prevent poverty in old age,” Ms. Ortiz noted.

“The long-term liabilities of austerity take time to show up. Depressed household income levels are leading to lower domestic consumption and slowing down economic recovery. It is alarming that future pensioners will receive lower pensions in at least 14 European countries by 2050,” she added.

Meanwhile, a handful of countries have expanded pension coverage dramatically in recent years. From the UN:

At the same time, a number of countries have registered positive trends in their social protection systems. China, Lesotho, Thailand, Timor-Leste, and Tunisia, for instance, have experienced what the ILO described as “remarkable successes” in the reach of their coverage with gains ranging from 25 to more than 70 per cent of the population.

Pointing to China, in particular, Ms. Ortiz observed that the country had achieved nearly universal coverage of pensions and increased wages while other countries, such as Argentina, Bolivia, Chile, Hungary, Kazakhstan, and Poland, were reversing the earlier privatization of their pension systems as they were too expensive and had not expanded coverage.

“Public social security systems with strong social protection floors are essential for economic recovery, inclusive development and social justice, and therefore must be an integral part of the post-2015 development agenda,” concluded Ms. Ortiz, referring to the new development agenda that will succeed the landmark Millennium Development Goals (MDGs), set to expire in 2015.

Read the full report here.

Norway Best Place For Elderly To Live

Flag of Norway

The Global AgeWatch Index, which rates the quality of life provided to elderly people by every country, was released yesterday. The country that offers the best quality of life to people over 60: Norway.

Pension coverage played a big role in the index’s ratings. From the Associated Press:

The Global AgeWatch Index, released on Tuesday, was compiled by HelpAge International, a London-based nonprofit with affiliates in 65 countries. Its mission is to help older people challenge discrimination, overcome poverty and lead secure, active lives.

The 13 indicators measured in the index include life expectancy, coverage by pension plans, access to public transit, and the poverty rate for people over 60. Scores of countries were not ranked due to lack of data for some of the criteria, but HelpAge said the countries included in the index are home to about 90 percent of the world’s 60-plus population.

Switzerland, Canada and Germany joined Norway and Sweden in the top five. The United States was eighth, Japan ninth, China 48th, Russia 65th and India 69th.


The new report devotes special attention to the issue of pensions and their role in helping older people remain active and self-sufficient. It praised several Latin American nations, including Bolivia, Peru and Mexico, for steps to extend pension coverage even to older people who did not contribute to pension plans when they were younger. Peru’s government established a means-tested pension program in 2011 that gives the equivalent of about $90 every two months to older people living in extreme poverty.

According to HelpAge, only half the world’s population can expect to receive even a basic pension in old age. It urged governments to move faster to extend pension coverage as their elderly populations swell.

Afghanistan ranked last.